© 2020 Dow Jones & Company. All Rights Reserved. **** THE WALL STREET JOURNAL. Friday, February 21, 2020 |B

viewers paying for more access

or additional content from pre-

ferred creators.

ByteDance declined to com-

ment for this article, and com-

pany officials have given no in-

dication that it is planning

such a subscription service.

Still, building up its offerings

would help keep users on its

platform, diversify its offerings

and give the company more

user data, which could lead to

more advertising dollars,

analysts say. “They are build-

ing an ecosystem which has

less risk, which does not solely

rely on one product,” said Mat-

thew Brennan, a China-based

tech consultant.

PleaseturntopageB

ByteDanceInc. is looking to

ride the momentum of its

blockbuster video app TikTok

by launching new apps and ex-

panding into e-commerce,

games and other areas, as the

company tries to compete

against tech giants globally.

The Beijing-based company

has launched a financial-ser-

vices app; is testing a music-

streaming service in India and

Indonesia; and has acquired

game developers in China,

among other moves. As for

TikTok, advertising executives

have speculated that Byte-

Dance could introduce a

subscription service, with

BYSHANLI

A Big River Steel employee checks the temperature of molten steel at the three-year-old mill located in Osceola, Ark.

HOUSTON COFIELD FOR THE WALL STREET JOURNAL

ByteDance, the video app’s owner, has expanded into music and games. A TikTok event in Tokyo.

SHIHO FUKADA/BLOOMBERG NEWS

Ultimate SoftwareandKro-
nosInc. are merging in a deal
creating a big new player in
workplace-software products.
The all-stock deal will cre-
ate a company valued at
roughly $22 billion including
debt, the companies said
Thursday, confirming an ear-
lier Wall Street Journal report.
Hellman & Friedman, the
private-equity firm that con-
trols both closely held compa-
nies, will remain the control-
ling shareholder, while
Blackstone GroupInc., which
owns stakes in both, will be
the largest minority investor
in the combined company.
Kronos CEO Aron Ain will
lead the combined company,
which will have more than
12,000 employees and dual
headquarters in Lowell, Mass.,
and Weston, Fla.
Ultimate Software develops
cloud-based subscription soft-
ware aimed at corporate hu-
man-resources departments. Its
offerings include the UltiPro
suite of products that allow em-
ployees to access tax documents
and pay stubs. Kronos software
helps companies with absence
and performance management.
The combined company
would have about $3 billion in
annual revenue.
Hellman & Friedman paid
about $11 billion last year to
take Ultimate Software private
and bought Kronos in 2007 in
a transaction valued at
roughly $1.8 billion.
“We have two remarkable
leaders in the human-capital-
management space that are so
complementary to each other,
it’s almost scary,” Mr. Ain said
in an interview. He said the two
businesses have only 3% over-
lap in their customer base, cre-
ating an opportunity for them
to cross-market their products.
He said there will also be a
significant new opportunity
for the businesses to grow to-
PleaseturntopageB

BYMIRIAMGOTTFRIED
ANDCARALOMBARDO

Workplace

Software

Deal Set

TECHNOLOGY: PARENT OF FIDELITY TO SPIN OUT DATA STARTUP B

SprintCorp. andT-Mobile
USInc. have agreed on new
terms for their merger, as the
wireless carriers race to close
the deal after overcoming a
federal court challenge.
The parties will improve
the exchange ratio in the all-
stock deal for T-Mobile’s par-
ent, Deutsche Telekom AG, the
companies said in a written
statement confirming an ear-
lier Wall Street Journal report.
U.S. District Judge Victor

soon as April 1.

Originally, 9.75 Sprint

shares were to be exchanged

for each T-Mobile share. Un-

der the revised deal,SoftBank

Group Corp., which owns

more than 80% of Sprint’s

common stock, will exchange

the equivalent of 11 of its

shares for each T-Mobile

share. Sprint’s other share-

holders will continue to get

the original exchange ratio.

Deutsche Telekom is to own

about 43% of the combined

company now, up from just be-

low 42% when the deal was

first announced nearly two

years ago, the companies said.

SoftBank’s percentage will

drop to approximately 24%

from 27%. The remaining 33%

is to be held by the public, up

from 31%.

To effect the changes, Soft-

Bank has agreed to surrender

48.8 million T-Mobile shares

to the new company, to be

called T-Mobile. Those shares

could be reissued to SoftBank

if T-Mobile’s stock price

reaches certain milestones be-

ginning two years after the

deal closes.

The original merger agree-

ment allowed either party to

walk away after Nov. 1, 2019,

without paying a penalty. Both

companies stuck with the deal

over the following months,

however, as they defended it

PleaseturntopageB

Marrero last week allowed the

deal to proceed by rejecting

arguments from a group of

state attorneys general seek-

ing to block the merger as an-

ticompetitive.

T-Mobile said after the

court ruling that it was work-

ing to close the transaction as

ByCara Lombardo,

Dana Cimilluca

andDrew FitzGerald

Sprint, T-Mobile Revise Merger

S&P3373.23g0.38% S&PFINg0.13% S&PITg1.01% DJ TRANSÀ0.82% WSJ$IDXÀ0.42% LIBOR3M 1.683 NIKKEI(Midday)23413.81g0.28% See more at WSJ.com/Markets

BUSINESS & FINANCE

INSIDE

TikTok Owner Makes Push

For Growth Beyond Video

Warren Buffett has lamented

his failure in recent years to find

an “elephant-sized acquisition.”

But, hisBerkshire Hatha-

wayInc. has amassed a $78.

billion stake inAppleInc. since

early 2016, based on Berkshire’s

latest reported holdings as of

the end of 2019.

Apple accounted for about

14% of Berkshire’s market capi-

talization as of Thursday, more

than any other single stock in

its portfolio.

Berkshire spent about $

billion on its Apple stake, the

company said in its 2018 annual

report. That exceeds the

roughly $32.7 billion Berkshire

paid to buyPrecision Castparts

Corp. in 2016, its biggest acqui-

sition of an entire company.

Apple “certainly is an ele-

phant” for Mr. Buffett, said

Thomas Russo, partner at Gard-

ner Russo & Gardner, a long-

time holder of Berkshire shares.

“It shows he’s certainly willing

to swing at a big fat pitch when

it comes across the plate.”

Berkshire’s enormous bet on

the tech giant underscores how

Mr. Buffett’s investment ap-

proach has changed over the

years, especially as market val-

ues have climbed and tech com-

panies have become more

prominent.

Berkshire’s stock has under-

performed the S&P 500’s total

return in the past decade,

prompting some investors to

question whether the Omaha,

Neb., conglomerate has grown

too big to beat the market.

Even after Berkshire plowed

tens of billions of dollars into

buying Apple shares, its overall

cash pile continued to grow

and hit a record $128 billion as

of Sept. 30. Some investors

have agitated for Berkshire to

buy back more stock or pay a

dividend.

Berkshire is set to release its

2019 results and Mr. Buffett’s

annual letter to shareholders

on Saturday. Mr. Buffett’s

widely read letters typically

touch on a variety of business

and investing topics, in addi-

tion to discussing Berkshire’s

results.

Mr. Buffett, Berkshire’s

chairman and chief executive,

spent his early investing years

trying to buy “cigar butts,” or

companies that were selling so

far below their value that an in-

vestment would likely be prof-

itable no matter how the com-

pany performed. He later

transitioned to focusing on

buying well-run companies

with strong competitive advan-

tages at reasonable prices.

Still, Mr. Buffett largely

avoided investing in technology

companies for years, saying he

didn’t understand them.

Mr. Buffett started to study

Apple after one of his portfolio

managers, either Ted Weschler

or Todd Combs, bought about

$1 billion in Apple shares for

Berkshire in early 2016.

As he studied the company

and questioned his great-

PleaseturntopageB

BYNICOLEFRIEDMAN

Buffett

Found His

‘Elephant’

With Apple

which makes steel from melt-

ing scrap in an electric fur-

nace. U.S. Steel eschewed that

process for decades, strictly

making steel from iron ore

melted in blast furnaces fueled

by coal.

U.S. Steel, which dominated

the steel industry for much of

the 20th century, has huge re-

serves of ore. But turning ore

into steel is an expensive pro-

cess that is difficult to throttle

back when demand wanes. In

recent years, more-profitable

and lower-cost electric-fur-

nace competitors led byNucor

Corp. andSteel DynamicsInc.

gobbled up market share. They

now account for more than

two-thirds of the steel pro-

duced in the U.S.

U.S. Steel’s Chief Executive

David Burritt is aiming to use

Big River to catch up. The goal

is to recast the Pittsburgh-

based company as a dual oper-

ator of blast furnaces and

electric-furnace plants like Big

River, known as minimills. U.S.

Steel now owns 49.9% of Big

River and plans to purchase

the rest by 2023 for nearly $

billion overall.

“Big River remains our top

strategic priority,” Mr. Burritt

said on the company’s latest

earnings call in January.

U.S. Steel also is construct-

ing an electric furnace at its

Fairfield, Ala., pipe mill after

PleaseturntopageB

OSCEOLA, Ark.—United

States SteelCorp. is betting

its future on an efficient new

mill along the Mississippi

River, not far downstream

from one of the old plants that

have long defined its labor-in-

tensive approach to steelmak-

ing.

U.S. Steel in October bought

a $700 million stake in three-

year-oldBig River SteelLLC,

BYBOBTITA

U.S. Steel Recasts Itself for Future

MoststeelintheU.S.ismadeinelectricfurnaces,andsharesincompaniesusingthat

processhaveoutperformedU.S.Steel.

U.S.steelproduction

Sources: Metal Strategies (production); FactSet (share performance)

120

0

20

40

60

80

100

million tons

1996 2000 ’05 ’10 ’15 ’

Electric

furnace

Blast

furnace

Shareperformanceofsteelmakers

40

• 
  


• 
  


• 
  


• 
  

0

20

%

2018 2019 2020

U.S.Steel

Nucor

Steel

Dynamics

Recession

BUSINESS

Airlines are strained by

the coronavirus after

thousands of China

flights are canceled.B

IVAN ABREU/BLOOMBERG NEWS

EARNINGS

Domino’s posts strong

sales and profit while

investing in its own

delivery operations.B

ANDREW HARRER/BLOOMBERG NEWS